Annuity Coverage Considerations
Immediate and Deferred Annuity
An immediate annuity is usually purchased via a single premium payment and the annuity payments will usually begin one month after the premium is received. Under a Deferred Annuity the payments provided by the insurer would normally begin only after an agreed time period has passed.
Annuity Policy Variations
It is possible for a wide number of variations to exist in the structure of an Annuity Insurance product in Hong Kong. From annuities which provide benefits payments to occur for a specific number of years, whether a death occurs or not (also known as annuity certain) to policies which offer annuities only for the lifetime of the annuitant (known as life annuity) a number of options are available to insurance purchasers in Hong Kong.
One type of annuity policy, known as Life Income Annuity with Period Certain or Guaranteed Annuity, offers payments for a least a specified number of years, whether a death occurs or not, and for life if the annuitant survives that period.
As can be seen from this example flexible and innovative combinations of annuity products exist in Hong Kong, enabling policyholders to properly plan for their financial futures.
Underwriting Annuity Insurance Products
Generally, the underwriting considerations for Annuity products in Hong Kong is completely the opposite of the underwriting principals of conventional life insurance products.
Under traditional life insurance plans premiums will normally increase with age, and will usually be higher for men than women of the same age. However, with annuity products the amount of each annuity benefit payment will increase with age, and men will generally receive higher annuity payments than women.
In very simple terms, an annuity product is based on the chances of the insured living while a life insurance product is based on the chances of the insured dying.
Life Insurance Comparisons in Hong Kong
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